Written by via fbi.gov
When Ray Brewer was looking to make a ton of money, he tapped into the renewable energy industry. From March 2014 through December 2019, Brewer ultimately stole more than $8 million from investors by claiming to build anaerobic digesters on dairies in California and Idaho.
Brewer orchestrated a company that allegedly built anaerobic digesters to convert cow manure into usable energy. According to Brewer, these digesters could then generate revenue and returns for company investors. Brewer told investors they would receive rights to the natural gas, Renewable Energy Credits (RECs), and tax incentives produced by the digesters.
But Brewer never built the digesters; they didn’t even exist. It was a scam—and Brewer used the money from investors for his own personal expenditures.
As part of the scam, Brewer falsely claimed to be an engineer and sought investors who had ties to the dairy industry or green energy industry. Brewer invested in paid advertisements in trade publications and industry-specific online advertisements. He also targeted investors at industry-specific conferences.
According to the FBI Sacramento Case Agent, “Brewer established a pattern of fraudulent behavior over many years. He consistently exaggerated his qualifications, was repeatedly untruthful, and falsified information.”
To convince investors that his company and digesters were real, Brewer created a slew of fake documents, including fake digester construction schedules, invoices for project-related costs, and digester power generation reports. He found stock photos of digesters in different stages of completion and sent them to his investors.
Brewer also took investors on tours of dairies where he claimed he would build the digesters. And while Brewer had legitimate lease agreements with some dairies, other agreements were completely made-up.
“There was just a myriad of lies and documents that were passed along to these investors to convince them that it was all real,” said the case agent. “For instance, Brewer sent at least one investor a forged contract with a multinational company in which that company purported to agree to purchase byproducts generated by these anaerobic digesters—when it’s processed, you get the methane, but then the byproducts are essentially a liquid fertilizer and compostable material.” In other words, investors could profit off the methane and these additional byproducts.
In addition, Brewer altered bank letters, in one case changing a letter to say that the bank had committed to lending him up to $100 million to build his anaerobic digestors. However, as the case agent explained, this was not the reality: “The real letter from the bank actually states that the bank had not committed to lending any money to Brewer, and in fact needed to conduct due diligence before they could make a final decision as to whether or not they would lend him money or open any type of joint credit.”
When investors sent Brewer money, he transferred the funds into multiple bank accounts he had opened under different identities and with fake descriptions to hide the locations, sources, ownership, and control of the money.
In some instances, Brewer claimed to refund investors all or some of their money—but the reality was that he was paying off his initial investors with money from his newest investors while keeping a chunk of money for himself. This type of financial fraud is referred to as a Ponzi scheme.